Denver Bad Faith Insurance Lawyer

Bad Faith Insurance Attorney In Denver, CO

When we make a deal, purchase a product, or sign a contract, we expect the other side to be acting in “good faith.”  Simply put, this means we expect the other side to be acting honestly and with good intent.  Many times the other side does just that. But some of the time the other side refuses to follow through with their side of the deal.  In these cases, the other side may be acting in “bad faith.”

In the state of Colorado, and in many states around the nation, insurance companies are barred from acting in bad faith towards their customers. If they do so, a customer may sue them for bad faith breach of an insurance contract.  If you feel you have been a victim of insurance bad faith, you should call an insurance Denver bad faith attorney at Cheney Galluzzi & Howard.

What Is Insurance Bad Faith?

To begin, we must understand when insurance bad faith applies.  It only applies in what are called “first-party” cases.  This means anytime you are the one paying for the insurance. For example, if you pay for homeowners insurance, then you have a first-party relationship with the insurance company.

On the other hand, if John Doe hits you with his car and you file a claim against his insurance company, you are a third-party claimant and the bad faith rules do not apply. However, in personal injury cases, such as auto accidents, your own insurance provider may act in bad faith if they unreasonably delay or deny your claims.

Insurance bad faith, originally, was a common-law idea executed by the courts.  This means that there was never any formal law on the matter, but rather the courts had adopted policies over the years that allowed insurance companies to be punished more harshly if they acted in bad faith.

In Colorado, this required the customer to prove that

(1) the insurance company acted unreasonably in its settlement of a claim and

(2) the insurance company knew its conduct was unreasonable or it recklessly disregarded the fact that the conduct was unreasonable.

As you can imagine, proving the second prong was difficult, but if you succeeded the courts could award not only the amount of money the insurance company was supposed to pay but also additional money for pain and suffering, inconvenience, fear, and anxiety.

Wanting to take a proactive approach and protect consumers, Colorado passed a law in 2008 which clarified and broadened insurance bad faith laws.  Now, a consumer need only prove that the insurance company unreasonably delayed the settlement of a claim instead of having to also prove the insurance company knew it was unreasonable.

The legislature also clarified the penalty for such behavior, using what are called “treble damages.”  Put simply, if an insurance company owes you $1,000.00 and it unreasonably refuses to pay you, the insurance company will now owe you $1,000 for the claim plus a $2,000.00 penalty (double the original amount).  The insurance company will also have to pay all of your attorney fees which can run tens of thousands of dollars.

It is hard to predict exactly what actions meet the definition of bad faith and, ultimately, those are up to the jury.

But some examples the Colorado legislature acknowledge are

(1) refusing to pay claims without conducting a reasonable investigation,

(2) failing to acknowledge and respond reasonably quickly to communications,

(3) delaying a claim by demanding a customer provide information the customer has already provided, or

(4) failing to provide a reasonable explanation for why a claim is being denied.

Protect Your Rights Against Unfair Insurance Practices In Colorado

In Denver, insurance companies are legally obligated to treat policyholders fairly. The Colorado Court of Appeals case Goodson v. American Standard Insurance Company (2003) is a powerful example of what happens when insurers fail to act in good faith. In this case, the court held the insurer accountable for unreasonable claim handling, awarding damages for the policyholder’s losses.

At Cheney Galluzzi & Howard, our Denver bad faith insurance attorneys fight for clients facing denied or delayed claims. Let us help you seek justice and recover what you’re owed. Call for a free consultation today.

Contact Our Denver Bad Faith Insurance Attorneys For A Free Initial Consultation

We pride ourselves in holding insurance companies accountable in Denver, CO.  If you or someone you know has been treated unfairly by an insurance company, call 303-209-9395 or complete our simple contact form.

Proudly Serving Denver, CO and Nearby Areas

Denver, Colorado, located at 39.7392°N latitude and 104.9903°W longitude, sits on the high plains just east of the Rocky Mountains. As the state capital and largest city in Colorado, Denver serves as a major legal and economic center for the region. Its diverse population and status as a transportation and business hub mean insurance disputes, including bad faith claims, are common.

Under Colorado Revised Statutes §§ 10-3-1115 and 10-3-1116, insurers are prohibited from unreasonably delaying or denying payment of valid claims. Policyholders who experience such bad faith practices may be entitled to recover:

• The amount of the covered benefit that was unreasonably delayed or denied.

• Two times that amount as a penalty.

• Reasonable attorney fees and court costs.

These remedies are designed to hold insurers accountable and deter unfair claim handling practices. Cases are often heard in local courts, including the Denver District Court.